Officials from the Knoxville Utilities Board took their case for getting into the broadband business to the public Monday, fielding questions from community members that kept returning to the theme of affordability for individual ratepayers who will have to pay higher bills long before they’re eligible for the utility’s planned internet service.
In the second of two public forums in a month, KUB board members and executives came to the Change Center in East Knoxville to give an overview of their plan to compete with private internet providers, most notably Comcast.
Their plan includes over $700 million of infrastructure upgrades over the next ten years, along with creating a new “Fiber Division” for the utility to handle internet service.
President and CEO Gabe Bolas introduced the plan as a cost saving measure in the long run for both the utility and its electricity customers.
He said it will also have the added benefit of providing the fastest upload and download speeds available and unlimited data for customers. These will be provided at or below the rates charged by leading internet providers in the local market.
“KUB is uniquely positioned to provide these services due to infrastructure upgrades that have already been planned or have already been implemented,” said Bolas.
KUB is already embarked on a major improvement to the reliability and efficiency of its electric grid that will reduce power outages by using an electric fiber network. This fiber network that KUB is installing can also be used to transmit internet data at lightning-fast speeds.
As the installation is completed over the entire electrical grid, KUB will also be able to offer reliable, high-speed broadband in areas where it’s presently unavailable.
According to Bolas, the upgrades that were in progress before the pandemic have presented KUB with an opportunity. “The COVID-19 pandemic highlighted the urgency of the need for reliable and affordable internet service. The need in the community exists now and KUB is prepared to help provide a solution as soon as possible,” he said.
The construction of 5,000 miles of fiber cable is projected to cost $702 million over ten years. KUB executives say they expect to pay for it with a combination of loans from the Electric Division, increased electric rates over the next three years, and fiber access payments from subscribers.
Previously planned electric rate increases will be higher and sooner. If approved, KUB customers would see rate increases of 3% for three consecutive years, beginning next year.
According to KUB, the average customer will see a $10.80 increase in their monthly bill after all three increases take effect, but subsequent increases would not be expected for at least another seven years.
Questions and comments were then taken from attendees, most of whom focused on the electric rate increases.
DeOssie Dingus of East Knoxville raised concerns about the timing of the rate increases as they would relate to the availability of broadband in a given area.
“I would hate for low-income folks who are already struggling to be paying more for a service they can’t even get,” said Dingus.
KUB Vice President Jamie Davis acknowledged that it would take seven years at best to connect the entire KUB service area to the fiber network while the rate increases would take effect starting next year.
“The factors that would determine where and when we offer broadband would be such as which areas already have a fiber backbone in place, which areas that have the most need for reliable internet, and where could the electric system benefit the most from having fiber,” said Davis.
Several other attendees agreed that while broadband could benefit their community in the long run with jobs, economic development, and better educational opportunities, the pandemic has exacerbated the immediate, day-to-day financial concerns for a growing number of low-income residents of color.
“For this broadband to work for us we will need to make sure this community is at the planning table,” said community advocate Vivian Shipe. “This is the future and we must take it into our own hands.”
Rick Held may be reached at email@example.com
Published on June 15, 2021